The U.S. Department of Labor has proposed a rule that would provide workers with summary information on 401(k)plans, including fee and expense information, for investment options available under their plans.
"Our proposal is consistent with public consensus that workers need clear and concise information, not dozens of pages of 'legalese,' about the investment options available under their plans, and that they would benefit greatly from having that information in a comparative format," said U.S. Secretary of Labor Elaine L. Chao.
The centerpiece of the proposed regulation is a requirement to provide investment-related information in a comparative chart or similar format. In the proposal, the department developed a model chart for complying with this requirement, while giving plan fiduciaries the flexibility to design their own charts or comparative formats.
The proposal would also require plan fiduciaries to disclose basic information about the plan and its investment options, such as what options are available under the plan, how to give investment instructions, investment returns and fees and expenses, and how to obtain more detailed information. This information would be given to participants on a regular and periodic basis.
In addition, the department is proposing conforming changes to its regulation under section 404(c) of the Employee Retirement Income Security Act.
The proposed regulation would be effective for plan years beginning on or after January 1, 2009. Comments on the proposed regulation should be directed to the U.S. Department of Labor, Employee Benefits Security Administration, Room N-5655, 200 Constitution Ave. N.W., Washington, D.C. 20210, Attention: Participant Fee Disclosure Project; electronically to e-ORI@dol.gov or via www.regulations.gov .
The proposal is published in the July 23 edition of the Federal Register.